Install issues with Act! 2010 and Server 2008 R2

I have been trying for a few days to install Act! 2010 on a new VM of Server 2008 R2 Standard. I get to the point where SQL Express is trying to install and then it errors out with ACT! has encountered an error and needs to close. Followed by SQL did not install successfully. Please review..... Clicking OK causes the install to close.

I should note that SQL 2012 is already installed on this server and working fine.